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Title:On the epistemic foundation for backward induction PDF Logo
Authors:Asheim, Geir B.
Issue Date:1999
Series/Report no.:Memorandum, Department of Economics, University of Oslo 1999,30
Abstract:I characterize backward induction in an epistemic model of perfect information games where players have common certain belief of the consistency of preferences rather than the rationality of choice. In this approach, backward induction corresponds to common certain belief of ‘belief in each subgame of opponent rationality’. At an interpretative level this result resembles the one established by Aumann [6]. By instead imposing common certain belief of ‘belief (only in the whole game) of opponent rationality’, I interpret Ben Porath’s [14] support of the Dekel-Fudenberg procedure.
JEL:C72
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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